Stanbic’s profits shoot up to UGX 336 billion in 2022

by Business Times
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private sector

Stanbic Holdings Uganda Limited (SHUL) has reported that profit after tax went up 33% to UGX357.4 billion from UGX269.3 billion in 2021. Assets surged 3.9% from UGX8.7 trillion to UGX9.1 trillion.

According to Andrew Mashanda, the Chief Executive their 2022 results are a testament of the resilience of their business.

Stanbic

“Despite the prolonged uncertainty of the global and local economy, we closed the year with a strong performance, and delivered a return on equity of 22%, well above our target of 20% and an improvement from 19% in 2021,” he said.

He noted that the consistent delivery of solid results reflects our unwavering commitment to a meticulous execution of our strategy, whose core pillars include revenue growth, people development and a disciplined approach to cost management while investing for growth.

Mr. Mashanda, said, the new subsidiaries which have been in operation for two years now “continued to make significant strides towards sustainability, the challenging operating environment notwithstanding”.

SUHL is part of the Standard Bank Group, Africa’s largest Bank and is comprised of 5 subsidiaries which include: Stanbic Bank Uganda Limited, the leading commercial bank in Uganda; Stanbic Properties Limited, a real-estate company; SBG Securities Uganda Limited, an investment and brokerage firm; Stanbic Business Incubator Limited, an enterprise development institution and FlyHub Uganda Limited, technologies and innovations company.

Stanbic

“Stanbic Properties Limited remains profitable and is executing various projects geared towards revamping our real estate portfolio while Flyhub received its first revenues during the year and continues to pursue more opportunities as businesses explore ways to become more efficient through automation,” said Mashanda. 

Stanbic Bank 2022 performance

According to published results, the bank reported that deposits grew 6.8% from UGX5.7 trillion to UGX6.1 trillion, driving a 9.8% growth in credit uptake, from UGX3.7 trillion to UGX4.1 trillion. 

As a result, income, for the first time crossed the UGX1 trillion mark⏤reaching UGX1.1 trillion, from UGX946 billion in 2021. Together with prudent cost management, net profit surged a record 33% from UGX275.4 billion in 2021 to UGX366 billion. 

The bank also reported that its assets had grown by 3.8% from UGX8.7 trillion in 2021 to UGX9 trillion.

Ms Anne Juuko, the bank’s Chief Executive revealed that in 2022, the value of restructured loans—as a result of the pandemic, considerably reduced from UGX197billion to UGX. 14.5 billion, while bad loans in the same pool docked at UGX. 26billion.

“As a result of the economic recovery of our customers, we saw a 9.8 per cent growth in demand for new credit in 2022 with the volume of disbursed loans increasing to 77,819 worth UGX. 4.0trillion from 63,639 approved applications worth UGX. 3.7 trillion disbursed in 2021,” Juuko said. 

Over 2 million Ugandans through SACCOs

According to Ms Juuko, the bank invested in financial inclusion efforts that contributed to a 30 per cent increase in the volume of transactions, as compared to 2021.

“A partnership worthy of mention is with the government’s Operation Wealth Creation and other development partners where notable success is noted in enabling access to our credit and capacity building through Savings and Credit Cooperatives (SACCO). We currently bank over 6100 SACCOs with a combined membership of nearly 2 million Ugandans across the country,” she noted

She revealed that the SACCOs have accessed affordable credit through our multi-stakeholder Economic Enterprise Restart Fund (EERF) to the tune of UGX 40 billion at interest rates as low as 10 per cent per annum for those involved in the agricultural space.

“It gives us great pleasure to also report that over 11,000 small businesses have opened accounts with us in the past year and that over 1,800 of them have already benefited from access to affordable credit at rates as low as 15.5 per cent,” said Juuko.

ALSO READ: How Stanbic managed to retain 22% bancassurance market lead

Stanbic paid 272 billion in tax and collected UGX 7.5trilion

Juuko noted that they paid UGX 272 billion in tax and collected UGX 7.5trn more on behalf of the government.

“In 2022, Stanbic paid a total of UGX 272 billion in taxes, making us the biggest taxpayer in the country’s banking sector. We are also pleased to have used the bank’s countrywide branch and agent banking network, as well as digital self-service channels to facilitate Ugandan taxpayers. Stanbic Bank remitted UGX 7.5 trillion shillings to Uganda’s revenue authority in 2022, representing 33 per cent of total remittances to the government by the entire banking industry,” she explained.

Lending being Stanbic Bank’s primary business, Ms Juuko revealed that credit is the lifeblood of the economy which effectively helps to drive Uganda’s growth that is why their credit is intentionally directed to sectors that have the highest potential to drive economic activity.

“Accordingly, we are pleased to share that Agriculture is still among the top five recipient sectors of Stanbic Bank Uganda’s financing in 2022, accounting for UGX437bn, and this is in line with the country’s key drivers of the economy. The other top recipients of our credit last year are household/consumer lending accounting for UGX1.04 trillion, trade at UGX663 billion, real estate at UGX 573 billion and transport/telecommunications at UGX 417 billion,” she noted.

Looking forward

Ms Juuko said their objective in the coming year and beyond will be to sustain the pace of their growth by strengthening the operating risk management capabilities and improving operational efficiency and remaining focused on solutioning for the customer to unlock growth opportunities for them.

“We remain committed to driving sustainable shared value that is equitable and inclusive achieving this requires a firm focus on financial inclusion, which involves ensuring that as many people as possible have access to financial services,”

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